A stipulation in the charter party of a steamer, that she is
"now sailed, or about to sail, from Benizaf, with cargo, for
Philadelphia," is a stipulation that she has her cargo on board and
is ready to sail.
A charter party with the above stipulation was made on the 1st
of August, in Philadelphia. The steamer was at Benizaf, in Morocco,
only three-elevenths loaded, and did not sail for Philadelphia till
August 7, and left Gibraltar August 9. Before signing the charter
party, the charterers asked to have in it a guarantee that the
steamer would reach Philadelphia in time to load a cargo for Europe
in August, but this was refused. They declined to have inserted the
words "sailed from, or loading at Benizaf." On learning when the
steamer left Gibraltar, they proceeded to look for another vessel.
The unloading of the steamer at Philadelphia was completed
September 7, but the charterers repudiated the contract: Held,
(1) The stipulation was a warranty or a condition precedent, and
not a mere representation.
(2) Time and the situation of the vessel were material and
essential parts of the contract.
(3) The charterers had a right to repudiate the contract, and to
recover from the owners of the steamer the increased cost of
employing another vessel.
The facts which make the case are stated in the opinion of the
Court.
MR. JUSTICE BLATCHFORD delivered the opinion of the Court.
On the first of August, 1879, a charter party was entered into
between the owners of the steamship
Whickham and the firm
of A. Schumacher & Co., composed of George A. Von Lingen, Carl
A. Von Lingen, and William G. Atkinson, of which the parts material
to this case are as follows:
Page 113 U. S. 41
"
Grain Charter Party, ______ Steamer"
"PHILADELPHIA, August 1, 1879"
"It is this day mutually agreed between T. H. Davison, Esq.,
owner of the Br. steamship
Whickham, of London, built 1876
at Newcastle, of 1,124 net tons register, or thereabouts, classed
100 A 1 in Br. Lloyds, now sailed or about to sail from Benizaf
with cargo for Phila., and Mess. A. Schumacher & Co.; that the
said steamship, being tight, staunch, and strong, and in every way
fitted for the voyage, with liberty to take outward cargo to Phila.
for owners' benefit, shall, with all convenient speed, sail and
proceed to Philada. or Balto. at charterers' option, after
discharge of in ward cargo at Phila., or as near thereunto as she
may safely get, and there load afloat from said charterers, or
their agents, a full and complete cargo of grain, and/or other
lawful merchandise, excluding petroleum or its products. Vessel to
load under inspection of either American or British Lloyd's
surveyors at her expense, and to comply with their rules. The cargo
to be brought to and taken from alongside at merchants' risk and
expense, not exceeding what she can reasonably stow and carry over
and above her cabin, tackle, apparel, provisions, and furniture,
and, being so loaded, shall therewith proceed to Queenstown,
Falmouth, or Plymouth, for orders to discharge at a safe port in
the United Kingdom, or on the continent, between Bordeaux and
Hamburg, both included (Rouen excluded), also Holland excluded, or
as near thereunto as she may safely get, and deliver the same,
always afloat, on being paid freight as follows: six shillings and
three pence sterling per quarter of 480 lbs. delivered, of wheat or
maize, other grain or stowage goods to pay in full and fair
proportion thereto, as customary at loading port: ten percent extra
if discharged on the continent, as ordered from port of call in the
United Kingdom, as above; if ordered to a direct port of discharge
on the continent, as above, on signing bills of lading, the rate to
be the same as to the United Kingdom for orders. In full of port
charges and pilotages (the act of God, restraints of princes and
rulers, the dangers of the seas and navigation, accidents to
boilers, machinery, etc., always excepted),
Page 113 U. S. 42
freight being paid on unloading and right delivery of the cargo,
in cash, without discount or allowance. . . . Fifteen (15) running
days (if the vessel be not sooner dispatched), commencing when
vessel is all ready and prepared to receive cargo, and written
notice thereof given to charterers, to be allowed for loading and
discharging vessel, and, if longer detained, charterers to pay
demurrage at the rate of forty (�40) pounds British sterling, or
its equivalent, per day. . . ."
"GEO. BLASSE"
"Witness to the signature of H.L. GREGG & Co."
"By cable authority from T. H. Davison"
"A. ALBERT"
"Witness to the signature of A. SCHUMACHER & Co."
On the 10th of September, 1879, the charterers filed a libel
in personam, in admiralty, in the District Court of the
United States for the District of Maryland, against the owners of
the Whickham, to recover $2,000 damages for a breach of the charter
party. The libel sets forth a copy of the charter party, as Exhibit
A, and avers that on the first of August, 1879, the libellants,
"having previously made a contract, which required them to ship
during that month a cargo of grain to Europe, and requiring a
vessel for that purpose, communicated these facts"
to the agents of the respondents, and the charter party, was
made; that the vessel had not sailed from Benizaf at the time of
the execution of the charter party, and was not then about to sail
therefrom; that by reason of such breach of the contract and
warranty, and the delay in the arrival of the vessel at
Philadelphia arising therefrom, the libellants were not afforded an
opportunity of loading the vessel with grain, either in
Philadelphia or Baltimore, during the month of August, 1879, and
she did not in fact arrive in Baltimore until after the expiration
of that month, nor did she arrive in Philadelphia in time to
discharge her inward cargo and load with grain during that month;
that the respondents did not notify the libellants of the arrival
of the vessel in, and her readiness to receive cargo at,
Philadelphia, and that in consequence thereof, the
Page 113 U. S. 43
libellants were compelled at higher rates of freight, to charter
another vessel for that purpose.
The respondents filed an answer on the first of December, 1879,
alleging that at the time the charter party was executed the vessel
was about to sail from Benizaf within the meaning of its language;
that she did, with all convenient speed, sail and proceed to
Philadelphia, and there, without delay, discharge her in ward
cargo, and as soon as discharged proceed without delay to
Baltimore, and was, without delay, tendered to the libellants to
load according to the charter party, and was refused by the
libellants for the sole cause, as alleged by them, that the
respondents had broken the charter party, because the vessel was
not at Benizaf, about to sail, on the first of August, 1879, and
that the libellants were aware of her arrival in Philadelphia, and
of the time she finished the discharge of her in ward cargo. The
fact of the prior contract by the libellants to ship grain to
Europe, and of the communication of knowledge thereof to the agents
of the respondents, is put in issue. The answer also alleges that
it is not material or competent to prove the existence of such
prior contract or knowledge of it by the respondents, or the
inability of the libellants to fulfill it, or the chartering of
another vessel.
On the same day, the owners of the vessel filed a cross-libel
in personam, in admiralty, in the same court against the
charterers, setting forth the charter party, and alleging that the
vessel at its date, was about to sail from Benizaf; that she did,
in pursuance of the charter party, proceed, with all convenient
speed, to Philadelphia with in ward cargo, and, being discharged
thereof, did, in accordance with the charter party, proceed to
Baltimore, and was ready to receive cargo from the charterers, of
which written notice was given to them, but they, without cause,
refused to receive and load the vessel, and repudiated the charter
party on the sole ground, as by them alleged, that the vessel was
not, on August 1st, about to sail from Benizaf, and that the
vessel, as soon as possible after such refusal, was rechartered for
a voyage from New York to Europe at a freight less by $1,912.58,
and with an increase of expense of $1,000 and more. The cross-libel
claims $3,000 damages.
Page 113 U. S. 44
The answer to the cross-libel, filed in January, 1880, avers
that the vessel had not sailed, and was not about to sail, from
Benizaf, on the first of August, 1879, but, on the contrary, had
not her cargo on board, and did not complete the loading of it till
the evening of August 7th, and did not sail from Benizaf till the
evening of August 8; that when she sailed from Benizaf she was not
provided, and in every way fitted, for the voyage, and did not
proceed to Philadelphia or Baltimore with all convenient speed, but
sailed without a supply of coal for the voyage, and stopped at
Gibraltar to obtain a proper supply; that the charterers received
no written notice of the vessel's arrival and readiness to receive
cargo from them at Philadelphia; that she did not arrive in
Philadelphia or Baltimore, and the charterers did not receive
written notice of her readiness to receive cargo from them until it
was too late for them to use the vessel for the purposes for which
they had chartered her, which purposes they communicated to the
agents of the vessel at the time the charter party was executed,
and that, in consequence of such delay and default, they were
compelled, before the arrival of the vessel, to charter another in
her place at a loss of $2,000, and, when she did arrive, they
refused to accept and load her.
It was stipulated between the parties that the allegations made
in the answer to the cross-libel should be treated as averments in
the original libel, and that, under the answer to the original
libel, any evidence might be offered, and any evidence taken, which
might be admissible under any proper state of the pleadings.
Proofs were taken, and the district court dismissed the original
libel, and decreed a recovery of $4,093.18 in favor of the
libellants in the cross-libel. 1 F. 178. The decision of the
district court proceeded on the ground that the words "about to
sail with cargo," in the charter party, meant that the vessel was
to sail as soon as with reasonable diligence she could get her
cargo on board.
The charterers appealed to the circuit court from the decrees.
Further proofs were taken, and that court found the following
facts:
Page 113 U. S. 45
"1. The British steamer
Whickham, owned by T. H.
Davison and others, the defendants in the original libel, sailed
from Shields on the 9th of July, 1879, bound for Lisbon, where she
arrived on the 16th, and, having discharged her cargo, sailed again
in ballast, on the 23d for Benizaf, on the coast of Morocco, to
take a load of iron ore, under a charter for Philadelphia. She
passed Gibraltar on the 25th, and arrived at Benizaf at 4:30 P.M.
of Saturday, the 26th. She began taking in cargo under the charter
for Philadelphia during the forenoon of Monday, the 28th. On that
day she took on board 115 tons, and on the 29th about 90 tons; but
on the 30th, none, and on the 31st only four boatloads. During this
time there was delay in delivering the cargo on board, as other
vessels in port were entitled to precedence in loading. After the
31st, the cargo was put on board with as much dispatch as could
have been expected at that place, and it was all in on the 7th of
August at 5:30 P.M. An hour later, the vessel sailed, and, stopping
five hours at Gibraltar for coal, on the 9th, arrived at
Philadelphia on the 2d of September. She completed her unloading at
that port on the 7th."
"2. The usual cargo at Benizaf is iron ore. In loading, a vessel
lies out in the stream about a quarter of a mile from the shore,
and the ore is taken to her in small boats of from five to seven
tons burden each. It is then passed up the ship's sides in baskets.
Two or three stages are put up between the boats and the ship's
decks, and two men on each stage receive and pass the baskets. This
is the only way of loading such cargo at that port."
"3. About the first of August, Gregg & Co., a firm of ship
brokers in Philadelphia, were authorized, by cable message from the
owners in England, to get a charter for the Whickham, to carry
grain from the United States, on her return voyage. Not being able
to do this in Philadelphia, the firm, on the first of August,
telegraphed Mr. Erickson, a ship broker in Baltimore, to look for a
charter in that city. In their telegram it was said that the vessel
'had sailed, or was about to sail, from Benizaf, with cargo, for
Philadelphia.' The precise form of the authority given by the
owners to Gregg & Co. is nowhere
Page 113 U. S. 46
shown from the evidence, further than may be inferred from the
telegram to Erickson."
"4. A short time before the first of August, Schumacher &
Co., of Baltimore, the original libellants, employed Mr. Foard,
another ship broker in that city, to procure for them a vessel to
take a cargo of grain to Europe, which they were under contract to
ship in August. He, finding that the steamers for that month were
scarce, and hearing of the Whickham, took Mr. Erickson to the
office of Schumacher & Co., and suggested that she might do. At
the interview which then took place, it was understood by all
parties that a vessel was wanted that could be loaded in August,
and that no other would answer the purpose. Schumacher & Co.,
doubting whether the Whickham could arrive in time, wanted a
guarantee that she would, but this was declined. All parties then
made their calculations as to the probable time of her arrival,
upon the basis of the language in the telegram, and finally
Schumacher & Co. agreed to take her, first, however, providing
that she might be loaded in Philadelphia or Baltimore at their
option, intending, if she did not arrive in time for Baltimore, to
get her cargo, under their contract, in Philadelphia. In these
calculations it was assumed by all that she would get away from
Benizaf not later than the second of August, and that her voyage
across would probably be about twenty days. This all occurred in
Baltimore on the first of August, and it does not appear from the
evidence that any of the parties, either in Philadelphia or
Baltimore, knew anything of the movements of the vessel except as
they were to be inferred from the telegram. There was no
communication with Benizaf by telegraph, the nearest telegraphic
station being at Gibraltar, which was a day's sail away."
"5. As soon as the bargain was concluded, Erickson sent to Gregg
& Co. for a charter party in form. The immediately sent the
draft of one, in which the vessel was described as 'sailed from, or
loading at, Benizaf.' This Schumacher & Co. declined to accept,
on the ground that their agreement was for a vessel that 'had
sailed, or was about to sail, from Benizaf, with cargo, for
Philadelphia.' This being communicated to
Page 113 U. S. 47
Gregg & Co., they at once sent forward a new draft, to meet
the wishes of Schumacher & Co., and using the language they
insisted upon. This new draft reached Baltimore on the second of
August, and was duly executed by all parties. This is the
instrument, a copy of which is marked Exhibit A, and filed with the
original libel. From this it appears that, in the printed blank
which was used, there were the following words: 'Charterers to have
option of cancelling this charter party should vessel not have
arrived at loading port prior to _____.' These words were erased by
drawing a pen through them before signing."
"6. Schumacher & Co. having ascertained, on the 9th of
August, that the steamer passed Gibraltar outwards from Benizaf on
that day, and being then satisfied that she would not arrive in
time to load, either at Baltimore or Philadelphia, in August at
once set about securing another vessel, and on the 16th got one,
which they afterwards loaded at an increased cost of freight to
them, over what they would have been compelled to pay the Whickham,
of one thousand nine hundred and eighty-eight 25/100 dollars. It is
agreed that this new charter was effected on as favorable terms as
it could have been in the month of August, and that, if Schumacher
& Co. are entitled to recover at all, it must be for the
increase in the cost of freight which they paid."
"7. The discharge of the cargo of iron ore from the Whickham was
completed with dispatch at Philadelphia, and on the 7th of
September she sailed for Baltimore, where she arrived on the 9th,
and was tendered Schumacher & Co., under the charter, on the
11th. They declined to accept her, for the reason that, as they
claimed, when the charter party was entered into, she had neither
sailed nor was about to sail from Benizaf, within the meaning of
that provision in the charter, as understood by the parties.
Another charter was then obtained, but at a loss to her of four
thousand and ninety-three 18/100 dollars, as of May 10, 1880. It is
agreed that this charter was as favorable as any that could have
been effected, and that if her owners are entitled to recover at
all, it must be for the above amount as their loss. "
Page 113 U. S. 48
The circuit court stated the following conclusions of law:
"1. That the
Whickham was not about to sail from
Benizaf on the first of August, within the meaning of that term as
used in the charter party."
"2. That Schumacher & Co. are entitled to recover from the
defendants to their libel the sum of $1,988.25, and the interest
thereon from September 11, 1879."
"3. That the cross-libel of T. H. Davison and others must be
dismissed."
A decree was entered in the two suits, reversing the decrees of
the district court, and adjudging a recovery of $2,128.07, with
interest until paid, in favor of the charterers, and dismissing the
cross-libel. 5 Hughes 221, and 4 F. 346. The owners of the vessel
have appealed to this Court.
The decision of the circuit court proceeded on the ground that
the language of the charter party must be interpreted, if possible,
as the parties in Baltimore understood it when they were
contracting. In view of the facts that all the contracting parties
understood that the vessel was wanted to load in August; that as
soon as the charterers learned that she did not leave Gibraltar
until the 9th, they took steps to get another vessel, and that they
declined to sign a charter party which described the vessel as
"sailed from, or loading at, Benizaf," the court held that the
language of the charter party meant that the vessel had either
sailed, or was about ready to sail, with cargo, and that the vessel
was not in the condition she was represented, being not more than
three-elevenths loaded.
The argument for the appellants is that the words of the charter
party, "about to sail with cargo," imply that the vessel has some
cargo on board, but is detained from sailing by not having all on
board, and that she will sail when, with dispatch, all her cargo,
which is loading with dispatch, shall be on board, and that this
vessel fulfilled those conditions. As to the attendant
circumstances at Baltimore, it is urged that the charterers asked
for a guarantee that the vessel would arrive in time for their
purposes, and it was refused, and that the printed clause as to an
option in the charterers to cancel was stricken
Page 113 U. S. 49
out, and that then the charterers accepted the general words
used.
The words of the charter party are, "now sailed, or about to
sail, from Benizaf, with cargo, for Philadelphia." The word
"loading" is not found in the contract. The sentence in question
implies that the vessel is loaded, because the words "with cargo"
apply not only to the words "about to sail," but to the word
"sailed," and as, if the vessel had "sailed with cargo," she must
have had her cargo on board, so, if it is agreed she is "about to
sail with cargo," the meaning is that she has her cargo on board,
and is ready to sail. This construction is in harmony with all that
occurred between the parties at the time, and with the conduct of
the charterers afterwards. The charterers wanted a guarantee that,
even if the vessel had already sailed, or whenever she should sail,
she would arrive in time for them to load her with grain in August.
This was refused, and the charterers took the risk of her arriving
in time, if she had sailed or if, having her cargo then on board,
she should, as the charter party says, "with all convenient speed,
sail and proceed to Philadelphia or Baltimore." Moreover, the
charterers refused to sign a charter party with the words "sailed
from, or loading at, Benizaf," and both parties agreed on the words
in the charter party, which were the words of authority used by the
agents in Philadelphia of the owners of the vessel. The erasing of
the printed words, as to the option of cancelling, was in harmony
with the refusal of the owners to guarantee arrival by a certain
day. So, also, when the charterers learned, on the 9th of August,
that the vessel did not leave Gibraltar till that day, they
proceeded to look for another vessel. It was then apparent that the
vessel had not left Benizaf by the first of August, or with such
reasonable dispatch thereafter that she could have had her cargo on
board, ready to sail, on the 1st of August.
That the stipulation in the charter party, that the vessel is
"now sailed, or about to sail, from Benizaf, with cargo, for
Philadelphia," is a warranty, or a condition precedent, is, we
think, quite clear. It is a substantive part of the contract, and
not a mere representation, and is not an independent agreement,
Page 113 U. S. 50
serving only as a foundation for an action for compensation in
damages. A breach of it by one party justifies a repudiation of the
contract by the other party, if it has not been partially executed
in his favor. The case falls within the class of which
Glaholm
v. Hays, 2 Man. & Gr. 257;
Ollive v. Booker, 1
Exch. 416;
Oliver v. Fielden, 4 Exch. 135;
Gorrissen
v. Perrin, 2 C.B.N.S. 681; Croockewit v. Fletcher, 1 H. &
N. 893; Seeger v. Duthie, 8 C.B.N.S. 45;
Behn v. Burness,
3 Best & S. 751;
Corkling v. Massey, L.R. 8 C.P. 395,
and
Lowber v.
Bangs, 2 Wall. 728, are examples, and not within
the class illustrated by
Tarrabochia v. Hickie, 1 H. &
N. 183;
Dimech v. Corlett, 12 Moore P.C. 199, and
Clipsham v. Vertue, 5 Q.B. 265. It is apparent from the
averments in the pleadings of the charterers of facts which are
established by the findings that time and the situation of the
vessel were material and essential parts of the contract.
Construing the contract by the aid of, and in the light of, the
circumstances existing at the time it was made, averred in the
pleadings and found as facts, we have no difficulty in holding the
stipulation in question to be a warranty.
See Abbott on
Shipping, 11th ed., by Shee, 227, 228. But the instrument must be
construed with reference to the intention of the parties when it
was made, irrespective of any events afterwards occurring, and we
place our decision on the ground that the stipulation was
originally intended to be, and, by its terms, imports, a condition
precedent. The position of the vessel at Benizaf, on the first of
August -- the fact that, if she had not then sailed, she was laden
with cargo, so that she could sail -- these were the only data on
which the charterers could make any calculation as to whether she
could arrive so as to discharge and reload in August. They rejected
her as loading, but if she was in such a situation, with cargo in
her, that she could be said to be "about to sail" because she was
ready to sail, they took the risk as to the length of her
voyage.
The decree of the circuit court is affirmed.